Show #12 | My Bitcoin brings all the girls to the yard

Bitcoin Extravaganza, recorded July 12, 2011:

For starters, all knowledge comes from the original Bitcoin Whitepaper:
- What is currency vs fiat currency.  Why does it matter if currency is rare? Brief history of bartering, banking, fractional reserve banking
- What is Bitcoin? Creator: Satoshi Nakamoto
- Why do Bitcoins have value?
- Describe btc client, what are transactions?
- All transactions are somewhat anonymous, all you give out is your public key
- last was $14.03
- Describe a block. Hard work done to get hash with leading 0’s. No known shortcut for this work
- Block chain, hashing
- 6 steps of network transactions
- All transactions are public. The block chain provides a Balance Sheet for all nodes in the network
- Chain theoretically grows at 4.2 megs a year but…blk001.dat 327megs, blkindex.dat 166megs
- Currency generated via blocks. Right you pay 50 btc to yourself if you ‘win’ a block by solving the hash. Chance of win = your-cpu / total-network-cpu
- Difficulty is adjusted every 2016 blocks or 2 weeks
- Right now difficulty is 52 bits: (number of 0’s in hex * 4) + top bits on first 0xHEX number) (
- Target money supply such that no more than 21 million coins ever exist.  Exponentially decreasing. First 4 years half of the coins ever are minted, next 4 years half of remaining minted. This is done by blocks winning 25, then 12.5 then 6.25 etc. Bitcoin supports fractions of coins up to 6 digits.
- Question: BTCs will invariably become “lost” due to people’s computers crashing, wallet.dat corruption, etc. Over the looong term won’t hundreds of thousands of BTCs be missing? How can they be “replaced” or “replenished?” What about hoarding?
- Bitcoin client no longer can do CPU generation
- Mining pools
- SIDETRACK to CPU vs CPU pipelines
- What is a pipeline?
- Bitcoin Watch (Market Data)
- Bitcoin mining hardware comparison
- MaxPC Dream Machine

Attack Vectors on Bitcoin
- There is an infeasible kind of attack. Redo the block chain from the start
- Only kind of attack is spending coins twice, requires forking blockchain from the now. Only possible to work if your-attacking-cpus > total-network-cpu (aka 51%)
- System designed so that the most lucrative way to attack is it to mine
- CANNOT GIVE AWAY OTHER PEOPLES BITCOINS due to public private key signing

Elliptic curve DSA signatures:
U.S. Department of Commerce, National Institute of Standards and Technology
See Section (4.7)

SHORT SUMMARY of public private key pairs
x private key
y public key
q and p are primes associated with the pair, g also related
Such math as y = g ^ x mod p

- Intellicache, (listener: Mike Shaw) points out that running a VM totally from RAM is EPIC. Problem is that the poster on reddit is moving VMs into and out of his RAM disk. He relies on dropbox to sync any changes he makes inside these RAM only VMs.
- If you use IntelliCache the RAM drive here could be used to dynamically cache any part of any running virtual machine it will keeping changes persistant to disk. If you shutdown all vm’s, the write caches flush before the VM’s shutdown. All that is left on the RAMdisk is read caches. These can safely be deleted once the machine is off. Rebooting host has same effect.
- Also I wasn’t clear, but my best suggestions for IntelliCache with SSD is to use SSDs for IntelliCache drive and slower spinning disks (aka thumpers) for your backend storage



Download MP3, My Bitcoin brings all the girls to the yard

  • Great podcast! I really like how in depth you go and explain the technical parts. In this case about Bitcoin.

    And about segmenting the podcast. I thought that you already had structured the podcast into segments. :D So keep it as it is!

    • Hi Daniel,

      Glad you enjoyed it! It’s good you like the pseudo-organization; we don’t have to change anything this way (I’m busy & lazy, lol)

  • Another great show!
    I agree with Daniel about segmenting the show – its already presented in sections and the random tangents the conversation take add interesting diversions and slightly obscure references (42!).
    I never use RAID 0 as I’ve lost far too many hard drives to be happy doubling my chances. However RAID 0 with a backup is FAR better than RAID 1 with no separate backup.
    The maths behind public/private key cryptography blew my mind when I first started using GPG for encryption. I’ve forgotten most of it now but it is an insanely powerful formula when you understand it.
    Not sure where the 4.2 Meg a year came from. This page claims a single block can grown to at most 1MB which at a block every 10 min works out at about 52GB a year. . At some point I would expect a summary block to be produced and the client to query an online repository if it needs historical data.
    Finally you mentioned only having 8 connections in bitcoin as you were behind a firewall. This caused issues as new installs were not getting the full blockchain fast enough so in version 0.3.24 they enabled uPNP by default. I now get 44 connections which makes the initial download faster and probably makes the whole network healthier as transactions get spread to more nodes faster.

    Phew! Sorry for the essay! :)

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